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March Tough, But Shows Silver Linings

Wall Street analysts saw a glass half full when March retail sales were reported.

Some companies reported double-digit declines in March. A silver lining in the news was that many companies beat Wall Street consensus on their sales performances. They showed improvements from the previous month’s business.

Cato Corp., a Charlotte, N.C.–based discount retailer, posted a decline of 21 percent in March. John Cato, the retailer’s president and chief executive officer, blamed a late Easter for the decline. “March sales were negatively impacted by the shift of Easter from March last year to April this year. Because of this shift, the best measure for performance is the combined sales for the two months,” Cato said in a prepared statement. Easter falls on April 16 this year.

Ken Perkins, president of Boston-area retail analysts Retail Metrics Inc., wrote in an April 6 note that Cato’s March performance was actually an improvement from its 25 percent same-store-sales decline in February.

Perkins also found improvement in the same-store-sales results of the long-suffering mall retailer The Buckle Inc. It posted a same-store-sales decline of 10.1 percent in March. In February, it reported a 23 percent decline. Perkins noted that times remain tough for Buckle. March 2017 is the 21st month in a row of same-store-sales declines for the denim-focused retailer.

March business was not great for L Brands Inc., the parent company for Victoria’s Secret, Pink and Henri Bendel. It reported a same-store-sales decline of 10 percent. Perkins, of Retail Metrics, said it was an improvement over February, when L Brands posted a 13 percent decline.

Mall-based action-sports retailer Zumiez Inc. posted a same-store-sales increase of 1.1 percent in March. It missed a Wall Street consensus of a 2.8 percent gain, Perkins said. Adrienne Yih, an analyst for Wolfe Research, wrote in an April 6 note that Zumiez had its business right. “Average unit retail was up (year over year), indicating a healthy mix from more full-priced selling of apparel goods and less discounting overall for the month of March,” Yih said.